Consideration
Something of value exchanged between contracting parties — typically money, goods, services, or a promise — that common-law courts look for before they will treat a promise as a contract.
What it means
Consideration is one of the four elements courts look for in a contract under common law (offer, acceptance, consideration, mutual intent). Each party must give something of legal value to the other. Consideration does not need to be adequate (a market-rate price) — it only needs to be real. A promise made without consideration is generally unenforceable as a gift, not a contract.
Read more
- What Makes a Contract Legally Binding? — Learn the five elements every legally binding contract must have — offer, acceptance, consideration, capacity, and legality — with real examples and jurisdiction notes.